Amazon Considering up to $40 Increase for ‘Prime’

Amazon.com said it is considering a more than 50% increase in the U.S. to its popular “Prime” two-day membership program to help cover increased shipping and fuel costs.

Zuma Press

The change – of between $20 and $40 annually – would be the first in the nine-year history of the Prime program. Amazon has brought in millions of higher-spending customers through the program, which promises unlimited shipping on many items, as well as video streaming for U.S. customers.

“With the increased cost of fuel and transportation as well as the increased usage among Prime members we are considering increasing the price of Prime,” Szkutak said. He revealed little else about the program, other than to reiterate its import.

The Prime program is considered to be one of Amazon’s chief competitive advantages because it encourages members to keep spending with Amazon, rather than with competitive retailers. Indeed, market research firm Consumer Intelligence Research Partners last year estimated Prime members may spend more than twice as much — $1,340 per year – than non-Prime members using Amazon.

As well, Amazon offers exclusive streaming video content as part of the U.S. Prime membership and the company has been beefing up its library to compete with Netflix and draw new users.

But Amazon risks alienating some potential customers because even at the low end of its proposed Prime price bump it would cost more per month than a Netflix account: $8.25 versus $7.99.